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Longer tenancies could halt rental purchases from a third of landlords – Paragon

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  • 04/10/2018
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Longer tenancies could halt rental purchases from a third of landlords – Paragon
Around a third of landlords would be less likely to buy property if three-year tenancies were compulsory, research suggested.

 

Buy-to-let investors said longer-term agreements would make them less likely to consider renting to student workers, migrants and young singles, according to a survey carried out by lender Paragon.

Older and retired people, as well as families would instead be a more favourable tenant type, landlords said.

Under government plans, rental agreements will be for three years as standard.

Secretary of state for housing, James Brokenshire, minister of housing, said the changes are aimed at making renting more secure.

A six-month break clause has been proposed to allow tenants and landlords to exit the agreement early.

Paragon is one lender that offers mortgages to landlords with three-year tenancies, but some lenders are more reluctant to accommodate the term.

John Heron, director of mortgages at Paragon said: “Landlords are highlighting that the diversity of the tenant population calls for a diversity of tenancy arrangements.

“While some groups value greater security, many other tenants favour flexibility. Young professionals, for example, value the flexibility that the private rental sector brings to move to different areas and to different types or property.

“In light of these findings, rather than impose longer-term tenancies as the primary or default arrangement in law, it may be preferable to bolster tenants’ rights to choose from a range of different tenancy lengths and boost incentives to landlords to enter long term arrangements where requested.”

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